Undaunted by Mozambique's lack of infrastructure, Indian firms had followed Vale and Rio Tinto to the mineral-rich African nation that was touted as the new low-cost rival to Australia for coking and thermal coal-hungry companies.

Among Indian firms, JSW has admitted to early disappointment in the exploration of an initial deposit that reportedly turned out to be burnt coal.

"It is not encouraging. We are lucky that we did not spend much. All the good assets were taken by Vale and BHP. They had the early mover advantage. The other companies including Indian companies went in later," explained a senior official at JSW Steel. For a few Indian firms who have made significant progress, there are hurdles awaiting them.

For Indian firms, the option now could be an expensive alternative rail system that Coal India is mulling.

"We are looking to develop our own rail system, and will be open to talking to other partners to come on board. We are considering appointing a project consultant soon," said a Coal India official, asking not to be named. In addition, the Essar Group has proposed to develop a 3,000-crore bulk handling port facility next to the Beira port. The idea reportedly is to connect its Zimbabwe investment to the Indian Ocean.

The existing Sena Railway Line, from Tete to Beira port, is already proving insufficient for Vale and Rio's traffic.